M&S launches full online grocery shop with Ocado

UK food and drink retailer Marks & Spencer’s full online grocery service has gone live today as part of its new joint venture with online delivery specialist, Ocado.

The wine aisles in M&S’s Hemel Hempstead store

The high street retailer acquired a 50% share of Ocado’s UK’s retail business for £750 million in the deal announced in February last year, which follows the end of Ocado’s 20-year partnership with Waitrose. M&S promised to ‘transform’ online grocery in the UK when the partnership was revealed.

The retailer already operates an online wine and spirits shop selling predominantly wine by the case, fine wines, magnums, and wine for gifting, which is understood to be continuing as before, but will now also sell its entire M&S food and drink range through the M&S @ Ocado website, including M&S branded wines, beers and spirits. In addition to more than 5,000 products in the M&S at Ocado range – around 750 are new, with a further 1,000 being added, Ocado lists around 55,000 products, including its own-label products.

The deal shares M&S’s database of 12million customer with its new partner, who has around 750,000 customers of it own, and is expected to yield around £70 million of savings through synergies per annum within three years, the retailer announced in February last year, due to its increased buying power, and shared marketing and innovation.

MD of M&S food Stuart Machin described it today as a long-term partnership.

“In preparation for go-live we have listened intently to customers to deliver an even bigger, better range—with more family pack sizes, more scratch cooking ingredients, household staples and organic options,” he said.

Ocado Retail, which can currently devivery to around 75% of UK househouds, said significant investment was being made to expand its capacity, which will increase by 40% in 2021 and more subsequently. However M&S warned on its website that because Covid-19 had caused an unprecedented growth in demand for online grocery shopping, Ocado was currently at capacity for delivery. “While every effort is being made to increase capacity, the extra demand may mean you won’t be able to secure a delivery slot straight away,” reassuring new customers on its website that “the Ocado team is working hard to open up more delivery slots so new customers can start to sign up.”

According to the latest data from Kantar, online grocery in the UK reached a new record market share in August, with Ocado seeing growth of 45.5% – the highest of all the retailers – taking its market share to 1.8% in the 12 weeks to 9 August 2020.